“Hope is not a strategy,” affirmed BP’s COO of production Bernard Looney. “We recognize the cost side of the equation. We took action early and did what most people have been doing.”
Speaking at two major events within weeks of each other—the Society of Petroleum Engineers (SPE) Annual Technology Conference and Exhibition (ATCE) in Houston and prior to that at SPE Offshore Europe 2015 (OE15) in Aberdeen—the COO was consistent in his messaging at both high-profi le industry gatherings about how BP is tackling one of the biggest downturns the industry has yet faced.
“We have to manage the things that we can manage. There are a lot of things that we can manage more efficiently [and] more productively,” he said.
Looney commented at ATCE, “Many companies will lose money this year. It may be OK to do that one year, but you can’t continue to do it year in and year out. We want to try and get the same activity done for less cost. That is the opportunity.” He fl agged up the general industry goal of achieving cost reductions of between 20% and 30% in upstream activities.
Digitalization is a key factor in improving the global upstream industry’s operational effi ciency. BP receives several terabytes of sand management data daily from its operations offshore Azerbaijan, including the Deepwater Gunashli facility, and thanks to digital investments can now process in real time what previously used to take several weeks to bring to shore and load up for analysis. (Source: BP)
Take control
The very nature of the upstream business means that the industry globally has to take the long-term view, he stressed.
“We do not know what the price of oil is going to be. But we can take control of what we can control. So how do we make our energy lowest cost? It’s good to have balance in your portfolio. We have deep water. We have a growing business in Oman. It’s better to take control of what you can.”
The industry has been through similar slumps on several occasions, he said. BP itself recently brought onstream what he described as one of its “most challenging projects.” Without actually naming it, he pointed out, “It was sanctioned when oil was $18 per barrel—so we have been here before.
“If prices and demand recover, we will reap the benefits of that, and if it doesn’t, we’ll be ready for it,” he said.
Looney took time in particular at both OE15 and ATCE to flag up the importance of technology as an enabler. This is especially the case when it comes to the digitalization of the E&P business as it catches up with other industries that are well ahead of it in the process, such as the aviation and pharmaceutical sectors.
Digitization rewards
Looney continued, “We are now in a new age—that of big data and digitization. In BP we have a tool called Well Advisor. It’s a remote digital monitoring system that we use to monitor blowout preventers, casing running, and other equipment and activities. It gives us real-time data via a user-friendly interface.
“The casing running system uses sensors on the drillstring to detect friction as the well is constructed and alerts the drilling team before it becomes a problem. It has been used in more than 400 runs of well casing without a single casing [string] getting stuck, and that has saved us an estimated $200 million capital expenditure in reduced nonproductive time.
“With the increased use of sensors and real-time data acquisition over the past two decades, there has been an exponential growth in volume, variety and velocity of the data we are gathering from our operations. There’s a much-quoted factoid that says 90% of the world’s data were created in the last two years. This presents us with a big challenge: How do we keep pace with this growth in data?” he asked.
Looney highlighted BP’s operations in Azerbaijan’s sector of the Caspian Sea, where it receives several terabytes of sand management data daily. This data would take the company several weeks to bring to shore on hard drives before loading them up for analysis.
“Now, by investing in our digital technology, we are able to process and analyze these data as well as integrate them with other production data in real time. We can do things in seconds that used to take months. This frees up our technical staff to be able to use their time more effi ciently to make decisions using the latest data and to implement planned activity,” he said.
Big data opportunity
Big data offers BP and the industry as a whole an opportunity to “revolutionize how we drill wells, how we optimize production, how we improve the operational integrity of our assets and vastly improve our base management and the efficiency of our people,” Looney said.
According to Looney, BP’s engineers were spending an estimated 40% of their time looking for data, a figure that the company wants to reduce to 1%.
Using a typical hydrocarbon processing facility as an example, Looney said there can be “up to 50,000 different possible routes that hydrocarbons could take through that facility.
“If you can map all those routes and work out the optimum paths, then you can optimize production. We’ve currently got technology to do that in place on around 50% of our assets, and we are working with Silicon Valley experts to extend the capability across to our more complex facilities.
“The value, once fully deployed, is expected to be signifi cant—adding up to 4% to production throughput throughout the world. Even at $50 oil, I’m sure you can calculate that represents signifi cant additional revenue. And critically, it is low capex. We’re talking about investing several million dollars in technology, not several billions in infrastructure upgrades,” he explained.
Trial project
In another example, he highlighted a trial currently underway in the U.K. North Sea, where BP is using big data analytics technology to screen huge geoscience datasets.
The trial project took a well log dataset from more than 5,000 wells and 250,000 sq km (96,525 sq miles) of 3-D seismic data.
“The data were screened to identify possible analogies to thin hydrocarbon-bearing sand in the Vorlich discovery well that was originally overlooked. A 100-well dataset would normally take a geologist a month to analyze. Using big data analytics, 5,000 wells were analyzed in a matter of seconds. The possibilities of leveraging such big data management capability are obvious,” he said.
The ongoing digitalization of the E&P sector dovetails neatly with the ever-present necessity to continue attracting fresh blood into the industry, added Looney, who described the next generation currently coming through school and university as “fully fledged digital natives.”
“It is how the next generation wants to work. It is how they see things. Technology is very much an enabler, but we have to make sure it’s focused in the right places,” he said.
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